Demand and Supply Of Energy

Question 1

What governs the demand of energy?

Answer 1

The size of a country’s population and it’s level of economic development.

Question 2

What governs the supply of energy?

Answer 2

Mainly resource endowment, but affected by capital and technology to exploit resources.

Question 3

What are some factors affecting energy supply?

Answer 3

• Geographical location - resource endowment, eg Russia and gas. Landlocked, harder to import. Sun, wind, coastal.
• Political - exploiting rivers may require permission from other countries sharing the river. International; agreements, eg Kyoto Protocol, can influence energy decisions of countries.
• Capital - cost to import/extract may be high, harder for LICs. FDI often essential in LICs. Even smaller wind turbines cost around £70,000. Bigger projects eg TGD costing much more.

Question 4

What are some factors affecting energy demand?

Answer 4

• Climate/Seasonality - needing heaters or air con.
• Population size.
• Economic development - more development means both more energy as more activity, but may have also developed ways of saving energy.
• Special events - eg Xmas, King coronation.